Suspects in Murder of Bar Owner Freed for Lack of Evidence

The two men suspected of slaying a Santa Ana topless bar operator were released from custody Thursday when authorities said they did not have enough evidence to file murder charges within 72 hours of their arrest.

State law prohibits detention of a suspect in a felony case beyond that time limit unless charges are filed, according to police.

However, Buena Park police spokesman Terry Branum said Mark L. Corbett of Altadena, an unemployed construction worker, and Joseph Orozco of Pasadena, an unemployed carpet layer, are still suspects in the Jan. 1 murder of convicted swindler and self-professed mobster Jimmy Lee Casino, 48.

Murder Charges

Branum and Orange County Deputy Dist. Atty. Jill W. Roberts said the release of Corbett and Orozco does not preclude murder charges being filed at a later date.

Meanwhile, for the third time since 1985, the Mustang, Casino’s topless bar in Santa Ana, filed for bankruptcy protection on Wednesday, apparently to prevent the Internal Revenue Service from seizing the establishment for unpaid back taxes.

“The bar was only a few days away from being closed down” by the IRS, Branum said.

Although the Mustang ostensibly is owned by Fortune Investment Inc., Casino’s attorney, Sylvan B. Aronson, conceded Thursday: “He (Casino) owned the place. We can say that now.”

Creditors in numerous civil suits and bankruptcy proceedings have alleged for years that Casino kept his ownership of the bar secret because, as an ex-felon, it would be very difficult for him to obtain a liquor license.

Shot in the Head

Casino was shot in the head with a small-caliber gun about 11:30 p.m. New Year’s Day inside his Buena Park condominium. Two men broke into the home, tied up his girlfriend, Shelly Faciones, 22, with a bandanna and belt, took jewelry and furs, and stole two cars. One of the cars later was found abandoned.

Casino often suggested to others that he had organized crime connections. But law enforcement officials, including Clayton Anderson, assistant chief of the bureau of investigation of the Los Angeles County district attorney’s office, believed that “Casino obviously was never a Mafia member as he many times hinted to people.”

Police said they have no evidence to indicate Casino’s killing was connected to organized crime. They said simple robbery may be the motive.

“The (murder) investigation is continuing,” Branum said, “but the time has run out on getting the evidence in. Once the arrest was made on probable cause, you have . . . 72 hours to be arraigned. We are still in the process of gathering information and we ran out of time.”

Arrested Monday Night

Corbett and Orozco were arrested Monday night at a Pasadena motel. Police had traced them to that address after a clerk determined that Corbett had used Casino’s credit card at a Canoga Park department store.

Attempts to reach Corbett and Orozco for comment on Thursday were unsuccessful.

Casino, whose real name was James Lee Stockwell, was a reputed gambler and served a federal prison sentence at age 21 for tax evasion. He also was convicted of extortion, counterfeiting charges, conspiracy to commit grand theft and mail fraud.

In January, 1986, he was charged with bilking more than $412,000 from at least 30 investors, including several peace officers, in Cowboy Hotdogs Inc. with a phony scheme to build hot-dog stands throughout Los Angeles County. Only one of the stands was ever built. Casino pleaded guilty and was ordered to pay restitution before Jan. 31 of this year or face five years in state prison.

Alban P. Silva, Casino’s attorney, said his client had paid partial restitution and was planning to pay the rest.

In 1985 and again in 1986, Fortune Investment Inc., the corporation doing business as the Mustang, filed for bankruptcy protection to ward off the IRS and other creditors. At one point the bar owed $395,000 in taxes to the IRS and thousands more to other government taxing agencies as well as to individual creditors, bankruptcy records show.

During Fortune Investment’s first bankruptcy proceeding, bankruptcy analyst Robert F. Bicher of the U.S. Trustee’s office wrote on Sept. 20, 1985, that “it appears there are a number of unexplained and questionable disbursements made” at the Mustang.

During the second bankruptcy, Bicher wrote on June 2, 1986, that “Michael Walsh and James Casino are not only continuing to draw compensation without the approval of the U.S. Trustee, but the interim statements indicate that, since the Feb. 7, 1986, filing date through May 17, 1986, James Casino has received payments in excess of $43,500.”

Among the expenses itemized in bankruptcy records was a “consulting and management agreement with James L. Casino, obligating the company to pay $20,000 per month.”

Sole Stockholder

Michael O. Walsh is listed in corporate records as the sole stockholder of Fortune Investments, but bankruptcy papers filed by the corporation in February, 1986, showed that Walsh drew only $800 a week in salary.

A declaration filed by an attorney for a creditor in the case said that, “although Mr. Walsh testified that he signs all the payroll checks and is the only individual authorized to sign checks . . . he did not remember whether Mr. Casino is paid in cash or with a check. He did testify that he occasionally gives Mr. Casino signed blank checks.”

Creditors attempted to have a trustee take over management of the firm, arguing in court papers that Casino could not be trusted.

But Assistant U.S. Trustee Harry Gastley said Thursday that the 1985 and 1986 bankruptcy proceedings were dismissed before a court-appointed trustee could take over operation of the bar. Gastley said the bar worked out agreements with the IRS to pay back taxes and avoid the trustee’s takeover.

In the latest bankruptcy petition filed on Wednesday, Fortune Investments showed $607,192 in liabilities against $500,000 in assets. Among the creditors were Joseph Abandonato of Huntington Beach, who is owed $22,000, and Russell W. Thiele of Irvine, who is owed $130,000.

Abandonato could not be reached Thursday.

Thiele, an engineer, said Thursday that he loaned $130,000 to the bar last year although he had “no idea of what it was for . . . I had security, (the loan was) secured by a note signed by Fortune Investment. I met him (Casino). I’ve seen the club.”

Unaware of Lien

Thiele said he was unaware of a tax lien on the bar and “had no idea . . . of his (Casino’s) financial difficulties.”

Records filed at the Orange County recorder’s office show the IRS filed two liens for unpaid payroll taxes owed by Fortune Investment Co. Inc. on June 17, 1985, for $410,410 and on Feb. 10, 1986, for $35,364. An IRS spokesman said he could not say how much, if any, of the back taxes had been paid.

Times staff writer Bill Farr contributed to this story.